Editor Brian Harrod Provides Comprehensive up-to-date news coverage, with aggregated news from sources all over the world from the Roundup Newswires Network
Zhong Shanshan’s net worth rises to $51bn as Nongfu Spring shares launch in Hong Kong
The stock market flotation of China’s biggest bottle water company has made its founder the country’s third-richest man, as shares in his company rocketed on their debut in Hong Kong.
At one point the paper fortune of Zhong Shanshan, the biggest shareholder in bottled water company Nongfu Spring, briefly surpassed that of China’s two richest men, Alibaba founder Jack Ma and Tencent founder Pony Ma.
Mark Haefele, chief investment officer, UBS Global Wealth Management, said:
While we expect the Fed to shy away from more radical easing measures, such as explicit controls on government bond yields, we believe Powell will likely outline other dovish measures. These could include a move toward average inflation targeting, giving the central bank more leeway to allow inflation to overshoot the 2% target while keeping rates pegged close to zero.
Maybe the age of the independent, activist central bank head is also coming to an end. Fiscal policy is more powerful and monetary policy needs to work in harmony with it. Monetary policy is being asked to do things (like tackle economic inequality) that it really isn’t suited to. But, here we are, waiting for Jay Powell to turn up at Grafton’s Saloon. He’s already done everything he can, he’s almost out of bullets and he may even have already won the fight, but we have placed our faith in him and desperately want fresh encouragement.
The economic collapse in Britain during the second quarter of 2020 was the most brutal on record. Unemployment is forecast by the Bank of England to soar to 2.5m by Christmas. The Brexit cliff edge approaches. Yet in the City, the FTSE 100 has been on the up.
Never has the disconnect between financial trading and economic fundamentals appeared so extreme. What explains surging asset prices (the FTSE jumped 2% on the same day it was revealed the economy had slumped by 20%) when the outlook for many workers is so grim?
S&P edges towards all-time record with oil prices and hospitality stocks rising as investor optimism rebounds
US stock markets moved closer to record highs on Tuesday after investors bet on a fresh round of government spending to lift the economy and counter the effects of the Covid-19 pandemic.
The S&P 500, seen as the broadest measure of US investor sentiment, raced to a 10-point gain by mid afternoon to leave it just 16 points short of the all-time high reached in February.
Here in Britain, roughly one in three furloughed workers returned to work in the first two weeks of July, when pubs, bars, restaurants and hotels reopened, official data from the Office for National Statistics showed today.
Businesses surveyed between 29 June and 12 July said 7% of their staff had returned from furlough within the past fortnight, while 17% remained on leave. The government-funded job retention scheme pays 80% of their salaries and covers more than 9 million people at the moment, about a third of the private-sector workforce. But it will be scaled back from Saturday and come to an end on 31 October.
Here is our full story on Airbus. The Toulouse-based planemaker has been hit hard by the collapse in air travel, and received only eight new orders between April and June, compared with 290 in the first quarter.
Julie Palmer, partner at business advisory and restructuring firm Begbies Traynor, says:
The success of Greggs has been the envy of the high street in recent years, however, even the bakery chain hasn’t been immune to the impact of Covid-19 which has forced its stores to close and eaten away at its top line.
For Greggs, achieving rent reductions from landlords will be first on the tick list, and indeed this has been a priority for many on the high street. But once these costs have been reduced its push to return to success will begin. And given its track record of marketing & PR success with its famous vegan sausage roll, I wouldn’t be surprised to see another high profile campaign on the horizon that captures the sentiment of a nation experiencing seismic change.
Let’s have a look at today’s corporate news. Greggs, Britain’s biggest bakery chain (known for its vegan sausage roll) has warned that sales won’t get back to pre-pandemic levels for as long as physical distancing continues.
But it’s fared better than other retailers: sales are now running at 72% of the 2019 level. All of its 2,050 stores reopened by July, after being forced to close during the Covid-19 lockdown imposed on 23 March. Greggs made a £65.2m loss before tax in the first half, compared with a £36.7m profit a year ago.
Three professors at the University of Southampton school of medicine have this week made a “major breakthrough” in the treatment of coronavirus patients and become paper millionaires at the same time.
Almost two decades ago professors Ratko Djukanovic, Stephen Holgate and Donna Davies discovered that people with asthma and chronic lung disease lacked a protein called interferon beta, which helps fight off the common cold. They worked out that patients’ defences against viral infection could be boosted if the missing protein were replaced.
Report identifies gap between market optimism and depressed state of economies
The global stock market rally represents a gamble by investors that central banks will ignore the risks of a buildup in debt and continue to provide support at the current record levels, the International Monetary Fund has warned.
In an update to its half-yearly global financial stability report, the IMF said central banks had been pivotal in the recovery of share prices from their Covid-19 trough but there was now a gap between the optimism of financial markets and the depressed state of economies.
The government is reportedly ready to let beer gardens open from 22 June as part of plans drawn up by a group of ministers, dubbed the “Save Summer Six”, who are looking at ways to restart the hospitality industry earlier than initially planned, writes my colleague Rob Davies.
The proposals, first reported in the Financial Times, would allow some of the 27,000 UK pubs that have outdoor space to serve customers for the first time in three months.
UK airline and travel stocks are up, for once, despite the new quarantine rules. The cruise operator Carnival is the biggest riser on the FTSE 100 index, up 14%, while BA owner IAG is 6.9% ahead and easyJet has gained 5.5%.
As reported earlier, Ryanair boss Michael O’Leary said the airline would fly through the 14-day UK quarantine, which he described as “rubbish”. Britain’s three biggest airlines – Ryanair, easyJet and IAG – have begun legal proceedings against the government over the quarantine rules, which they argue are illogical and unfair, and come months late.
Young’s pub chain intends to open all of its 276 sites by the 3 August, and is hopeful the business can “bounce back” once its pubs are allowed to reopen, but expects trading to be “materially below average” for the rest of the year.
Another interesting detail from the SMMT data: Tesla’s Model 3 was the most popular car during May.
Germany’s final reading for the manufacturing PMI in May is 36.4, worse than expected, and up only slightly from April’s 11-year low of 34.5. It signals deep contraction.
Phil Smith, principal economist at IHS Markit, said:
The latest data show that business continues to be severely disrupted by the COVID-19 crisis. Even though more factories have started to resume operations after the loosening of restrictions, weak underlying demand is still a limiting factor, as evidenced by the survey’s measure of new orders rebounding far less than that of output in May.
Manufacturing production was already down 7-8% from a peak in late-2017 even before the onset of the pandemic, and now that figure looks to be in the region of 25-30%. With production as far as it is below capacity and manufacturers not expecting a full recovery anytime soon, factory job losses have continued to accelerate, led by another round of staff cuts in the particularly ravaged investment goods sector.
The French manufacturing PMI rose to 40.6 in May (slightly up from the preliminary reading of 40.3), compared with 31.5 in April.
Eliot Kerr, an economist at IHS Markit, which compiled the survey, said:
Despite some French manufacturers beginning to resume normal operations in May, output continued to decline following April’s record contraction. Although the rate of decline eased, the further reduction in activity highlights the challenges that the economy faces in its recovery from this crisis.
Firms are now presented with an environment of subdued demand, as clients remain hesitant to place orders amid uncertainty over the removal of restrictions and the potential for further outbreaks.
In total the coronavirus government support for UK workers has come to £21.8bn, if you add together the money paid for furloughed employees and income support for self-employed workers.
More than 10m British workers have been given some form of income support, if furlough numbers are added to those who have claimed self-employed support*.
More struggles for the British property sector:
British Land, which owns shopping centres including Sheffield’s Meadowhall and Drake Circus in Plymouth, has written down the value of its retail portfolio by more than a quarter due to the impact of the coronavirus.
Burr’s cellphone seized overnight in inquiry into claims he used private coronavirus briefing to sell stocks before market plunge
A Republican US senator stepped down from a key committee leadership role in Congress on Thursday after his phone was seized overnight by investigators with a warrant looking into allegations that he used private briefings as inside information to dump shares before the market plummeted over the coronavirus crisis.
Donald Trump’s threats to reignite the US-China trade war over coronavirus has triggered another sell-off in global financial markets, as the economic costs of the pandemic continue to mount.
Against a backdrop of rising tension between the world’s two economic superpowers, share prices resumed a downward slide on Friday with the FTSE 100 falling by 144 points, or 2.5%, in London.
Shares in Zoom have dropped over 6% today, after the video-conferencing services admitted it wasn’t quite as popular as thought...
Zoom had initially said it had 300 million daily users, following the surge in remote working. But, it actually has 300 million daily meeting participants.
Zoom shares dropped more than 7% after the company walked back on claims it has 300 million daily active users. $ZM actually reached 300m daily participants, the difference being that meeting participants can be counted more than once.https://t.co/UIVYBP9sqt
Shares have soared on the world’s stock markets after investors shrugged off a deep slump in the US economy and pinned their hopes on a possible breakthrough in treatment for Covid-19.
Wall Street has opened higher, despite the prospect of a sickening slump in growth this quarter.
The Dow Jones industrial average has gained 109 points, or 0.46%, to 23,884 as a new week’s trading begins.
Alexandra Scaggs of Barrons has spotted that General Motors’ banks pushed it to suspend its dividend (as flagged earlier).
so GM suspended its dividend & share buybacks
one interesting point that's not in the headlines: Banks wanted that as a condition for extending more credit to the company https://t.co/RWCWF4tvea
to me the press release reads like "hey we decided to stop doing these things"
and the filing reads like "our lenders asked us to stop doing these things before they would extend the repayment date on one of our loans" pic.twitter.com/wH5R4aCqDF
One month after a national lockdown was declared in an attempt to limit the spread of Covid-19, it is clear that Britain is heading for the deepest recession in living memory.
Boris Johnson’s government launched unprecedented restrictions on 23 March, telling the British public that they must stay at home and bringing life as the nation knew it to an abrupt halt.
European markets are falling deeper into the red this morning, as coronavirus recession fears swirl.
The FTSE 100 is now down 90 points, or 1.5%, at around 5,700 points - with similar losses in other markets.
The OBR says the UK economy could fall by 35% in the second quarter. Brutal for sure, but it also expects a very sharp bounce back. This puts it in the V-shaped recovery camp, which is an ever-decreasing circle. Charles Evans, the Chicago Fed president, said yesterday the US is in for a very sharp but hopefully short downturn.
Money managers are more pessimistic. According to Bank of America’s latest Global Fund Manager Survey, just 15% see a V-shaped recovery. Over half (52%) see a U-shaped recovery, where the long line along the bottom stretches on for some time, perhaps years. A fifth (22%) see a W-shaped recovery – possibly sparked by a sharp bounce back and second or third wave of infections – and 7% see the dreaded L – a long depression like the 1930s and no real recovery. The biggest tail risk is a second wave of infections, which makes the speed at which you reopen economies key. My bet, for what it’s worth, is WWW.
Newsflash: Global oil demand is expected to fall by a record amount this year -- according to industry experts.
The International Energy Agency has predicted that demand will slump by 29 million barrels per day in April -- to levels last seen in 1995 -- as the Covid-19 lockdown hits demand extremely hard.
“By lowering the peak of the supply overhang and flattening the curve of the build-up in stocks, they help a complex system absorb the worst of this crisis.
“There is no feasible agreement that could cut supply by enough to offset such near-term demand losses. However, the past week’s achievements are a solid start.”